Seaweard v. First Nat. Bank
| Decision Date | 29 May 1917 |
| Citation | 165 P. 232,84 Or. 678 |
| Parties | SEAWEARD v. FIRST NAT. BANK OF ONTARIO. [a1] |
| Court | Oregon Supreme Court |
In Banc.
Appeal from Circuit Court, Malheur County; Dalton Biggs, Judge.
Action by J. H. Seaweard against the First National Bank of Ontario Oregon. From a judgment for plaintiff for an insufficient amount, each party appeals. Modified and remanded.
This is an action by J. H. Seaweard against the First National Bank of Ontario, Or., a corporation, to recover $2,614.16 as money had and received to the use of T. M. Seaweard and E. F Seaweard, partners as Seaweard Bros., which claim is alleged to have been assigned to the plaintiff. This action is a continuation of the suit of the First National Bank v Seaweard, 78 Or. 567, 152 P. 883. The facts there set forth and here involved are to the effect that about January 1, 1911, T. M. Seaweard and E. F. Seaweard sold and conveyed a farm in Malheur county, Or., to Emil E. Dean, Earl M. Dean and A. M. Johnston, who as part consideration therefor gave the vendors four promissory notes of $5,000 each, and secured the payment thereof by a mortgage of the farm. T. M. Seaweard and E. F. Seaweard, on February 14, 1913, were indebted to the defendant herein on their matured promissory notes in the sum of $14,437.23, to secure which they assigned as collateral and pledged to an officer of the bank the notes for $20,000 and the mortgage securing them. Being unable to pay the matured installments of these obligations, the makers thereof and their wives, on February 21, 1913, executed a deed of the farm to an officer of the bank, who took the title in trust for his principal and gave the vendors last named an option to repurchase the land on or before May 24th of that year by paying the amount of the notes for $20,000 together with the taxes and other expenses which the bank might incur in operating the farm, whereupon the four notes were marked, "Paid," the mortgage canceled, and these instruments surrendered to the makers. The officers of the bank then took possession of the farm with the right to receive the rents, issues, and profits thereof. The option referred to not having been exercised, the officers of the bank executed to T. M. Seaweard and E. F. Seaweard an option to repurchase the farm on or before November 1, 1913, upon the payment of their indebtedness to the bank, the taxes, and the expenses of keeping the premises in repair. The latter option not having been exercised, the bank commenced a suit against T. M. Seaweard, E. F. Seaweard, Emil E. Dean, Earl M. Dean, and A. M. Johnston, and the wife of each, treating the conveyance of the farm to an officer of the bank as a mortgage, alleging that such transfer was made pursuant to an agreement with T. M. Seaweard and E. F. Seaweard, setting forth the latters' matured promissory notes, which stipulated for the payment of a reasonable sum as attorney's fees in case suit or action was instituted to collect any part thereof, and praying a foreclosure of the lien created by the deed to an officer of the bank. The answer of T. M. Seaweard and E. F. Seaweard denied that such conveyance was executed with their consent, and for a further defense alleged substantially that the notes for $20,000 and the mortgage securing them were pledged as collateral to the bank, which converted them to its own use, thereby becoming liable for the payment of such obligations, less, however, the indebtedness of T. M. Seaweard and E. F. Seaweard to the bank, aggregating $15,485.72, which sum was tendered in satisfaction of their matured notes but upon condition that the bank deliver to them the notes for $20,000 and the mortgage securing them, which, it will be remembered, had been surrendered to the makers. The reply controverted the allegations of new matter in the answer, and the cause being at issue was tried resulting in a decree as prayed for in that complaint awarding to the bank a recovery of its indebtedness against T. M. Seaweard and E. F. Seaweard and $1,500 as attorney's fees provided for in their promissory notes, and they appealed.
After a trial in this court, that decree was modified by disallowing any sum as attorney's fees and ordering that unless within 90 days from the entry of the mandate in the lower court T. M. Seaweard and E. F. Seaweard paid to the bank the amount of their indebtedness to it, less $15,485.72, the sum so tendered, and $334.24, which had been obtained by the officers of the bank in operating the farm, the lien of the deed of the premises should be foreclosed, but in case such payment was made a deed should be executed by the holder of the legal title to T. M. Seaweard and E. F. Seaweard. First Nat. Bank v. Seaweard, supra. The amount so specified was paid within the time limited, whereupon a demand was made upon the bank for the payment of $2,614.16, which sum it had received in the year 1915 and during the pendency of the appeal, as rents, issues, and profits of the farm. Upon a refusal to pay any part of that sum, this action was instituted. The answer herein denies the material averments of the complaint, sets forth the facts hereinbefore stated, and for a further defense and by way of counterclaim alleges, in effect, that in operating the farm during the year 1915 the bank was entitled to $78.42 for caring for the premises; that it had paid out $212.15 for taxes, repairs, etc.; that in the suit to foreclose the lien the bank had been obliged to employ attorneys, to whom it paid $1,500, and had also disbursed the further sum of $350.05 as expenses incurred in that suit, the prosecution of which was necessitated by the failure and refusal of T. M. Seaweard and E. F. Seaweard to pay their indebtedness to the defendant--all of which facts the plaintiff knew when he took an assignment of the claim here sued upon. For a second defense and by way of offset, the facts hereinbefore detailed are substantially repeated, and it is averred, in effect, that in the decree foreclosing the lien all accounts between T. M. Seaweard and E. F. Seaweard and the bank were considered and finally determined, and the decree rendered in that suit bars the maintenance of this action, setting forth copies of the pleadings, decree, mandate, etc., therein, and making them a part of the answer, designated as Exhibits "A," "B," "C," "D," and "E." For a third defense and by way of recoupment, the facts hereinbefore specified are reiterated, and it is alleged generally that at all the time the possession of the farm was held by the bank it was entitled to $78.42 for caring for the premises; that it paid out $212.15 as taxes and for repairs, etc.; that in the suit to foreclose the lien the bank was compelled to pay $1,500 as attorney's fees and also to disburse $350.05 as expenses in prosecuting that suit, amounting to $2,140.62, which outlay could have been avoided if T. M. Seaweard and E. F. Seaweard had paid their obligations to the banks; and that all such facts were known to the plaintiff when he took an assignment of the claim referred to. The reply put in issue all the averments of new matter in the answer, except the payment of $212.15 for taxes, etc., for which sum it is admitted a credit should be allowed. The reply in referring to the exhibits set forth in the answer contains a paragraph the material part of which reads:
"Plaintiff admits that said defendant paid out the sum of $1,500 for attorney fees, and the sum of $350.05 for court costs, filing fees, transcript, taking of testimony, printing bills, and other incidental expenses of said litigation in said Bank-Seaweard Case, all of which are the same sums referred to in defendant's first answer and defense, and denies that, by reason of acts therein complained of, defendant was damaged in the sum of $1,850.05, or any other sum whatsoever, and alleges that the question whether or not the defendant was entitled to recover said sum of $1,500 for attorney fees or any part thereof, and said sum of $350.05 or any part thereof, was and ought to have been litigated in said Bank-Seaweard Case, and the plaintiff hereby refers to Exhibits 'A,' 'B,' 'C,' 'D,' and 'E' attached to the said affirmative answer and defense of defendant to plaintiff's complaint, and hereby makes said exhibits and each thereof a part hereof, and alleges that by reason of said adjudication defendant is and ought to be precluded and estopped from alleging or claiming any sums whatsoever as attorney fees and costs by reason of said litigation in said Bank-Seaweard Case."
Based on these issues, this case was tried, without the intervention of a jury, upon an agreed statement of facts from which the court deduced conclusions of law to the effect that the plaintiff was entitled to recover from the defendant $2,614.16, the sum received by it in the year 1915 as rents, issues, and profits of the farm, against which the defendant was entitled to offset and recoup $1,500 as attorney's fees incurred in prosecuting the foreclosure suit, $212.15...
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